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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number: 000-56738

Sealy Industrial Partners IV, LP

(Exact Name of Registrant as Specified in its Charter)


Georgia	88-1030040
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
333 Texas Street, Suite 1050, Shreveport, LA	71101
(Address of principal executive offices)	(Zip Code)

(318) 222-8700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     None

     None

     None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 5, 2025, the registrant had 3,804,323 units of limited partnership interest outstanding.

Table of Contents


			Page

PART I.	FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets	2
		Consolidated Statements of Operations	3
		Consolidated Statements of Changes in Partners' Capital	4
		Consolidated Statements of Cash Flows	5
		Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		28
Item 4.	Controls and Procedures		28

PART II.	OTHER INFORMATION		30

Item 1.	Legal Proceedings		30
Item 1A.	Risk Factors		30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 3.	Defaults Upon Senior Securities		31
Item 4.	Mine Safety Disclosures		31
Item 5.	Other Information		31
Item 6.	Exhibits		32
Signatures			33

GLOSSARY


Annualized Base Rental Revenue	Contractual monthly base rent as of September 30, 2025 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of September 30, 2025, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.
Capitalization Rate	Commonly referred to as Cap Rate, determined by dividing the property’s net operating income by its purchase price.
Cash Rent Rate Change	The percentage change comparing the cash base rent of the new or renewal lease commenced during the period to the cash base rent of the last expiring comparable lease for in-service properties. The calculation compares the first cash base rent payment due after the lease commencement date to the cash base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. All leases that are short-term, which is defined as less than 24 months, are excluded from the calculation.
Code	Internal Revenue Code of 1986, as amended.
Comparable Lease	A lease in the same space with a similar lease structure as the previous in-place lease.
DRIP	Distribution reinvestment plan.
GAAP	Generally accepted accounting principles in the United States.
GLA	Gross leasable area.
In-service Property	A property is deemed as in service unless it is considered a value-add or redevelopment property. Properties are placed back in service upon the earlier of attaining 90% occupancy or 12 months after the move-out or completion of redevelopment.
NAV	Net asset value, which means the market value of all of a company’s assets, including but not limited to its real estate assets, after subtracting the market value of all of its liabilities.
New Lease	A lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.
Occupancy Rate	Leased and commenced square footage divided by gross leasable square footage.
REIT	Real estate investment trust.
Renewal Lease	A lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.
Retention Rate	The percentage of tenants that renewed during a fiscal year, based on the month when the activity physically impacts the occupancy. A space is considered retained (i) if a space is backfilled within one month of move-out with a positive rent rate change on either cash or GAAP basis; or (ii) if a sub-lessee signs a lease for longer than 24 months upon expiration of the original lease. Space is excluded from retention in the following situations: (i) renewal or new leases for less than 24 months; (ii) early terminations and bankruptcies; or (iii) if a move out is expected within the first 12 months of acquisition.
Same Store Properties/Acquired Properties	Same Store Properties are properties acquired before January 1, 2024 and held as in-service properties at September 30, 2025. Acquired Properties are properties acquired on or after January 1, 2024 and held as in-service properties at September 30, 2025.
Value-Add/Redevelopment Properties	Properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date or will be less than 75% occupied due to known move-outs within two years of the acquisition date; or (ii) 20% or greater of the acquisition cost will be spent to redevelop the property within 24 months of the acquisition date.
Weighted-Average Lease Term	The contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, weighted by annualized base rent revenue.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, changes in partners’ capital, and cash flows reflects all adjustments, consisting solely of normal and recurring adjustments, that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned financial statements.

The accompanying consolidated financial statements should be read in conjunction with the notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and with our registration statement on Form 10-12G filed with the Securities and Exchange Commission (the "SEC") on April 21, 2025 and Form 10-12G/A filed with the SEC on May 30, 2025 (collectively, our "Registration Statement on Form 10"). Our results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results expected for the full year.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Balance Sheets


	September 30, 2025			December 31, 2024
(in thousands, except Units data)	(unaudited)
ASSETS
Real estate assets, at cost:
Buildings and improvements	$	322,502		$	226,951
Land		50,349			36,333
Land improvements		39,277			30,328
Tenant improvements		501			269
Total real estate assets, at cost		412,629			293,881
Less: accumulated depreciation		(14,972	)		(8,580	)
Total real estate assets, net		397,657			285,301

Cash and cash equivalents		13,096			11,389
Prepaid expenses and other assets		9,251			5,180
Deferred financing costs, net of accumulated amortization of $910 and $424 as of September 30, 2025 and December 31, 2024, respectively		9			61
Acquired value of in-place leases, net of accumulated amortization of $12,902 and $6,979 as of September 30, 2025 and December 31, 2024, respectively		34,857			24,220
Above market intangible lease asset, net of accumulated amortization of $65 and $57 as of September 30, 2025 and December 31, 2024, respectively		243			17
Total Assets	$	455,113		$	326,168

LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Secured revolving credit facility	$	13,000		$	34,500
Term loan (Note 4)		103,510			-
Accounts payable and accrued expenses		15,012			9,387
Deferred revenues		1,716			1,387
Below market intangible lease liability, net of accumulated amortization of $1,068 and $436 as of September 30, 2025 and December 31, 2024, respectively		4,026			2,434
Total liabilities		137,264			47,708

Commitments and contingencies (Note 6)		-			-

Partners' Capital
Series A preferred equity		125			125
General Partner's capital		8			8
Limited Partners' capital, 4,171,102 Units and 3,529,829 Units outstanding as of September 30, 2025 and December 31, 2024, respectively		315,733			276,252
Non-controlling interests		1,983			2,075
Total partners' capital		317,849			278,460

Total Liabilities and Partners' Capital	$	455,113		$	326,168

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Operations (Unaudited)


	Three Months Ended						Nine Months Ended
(in thousands, except Units and per-Unit data)	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Revenues
Rental revenue	$	9,742		$	5,327		$	26,706		$	14,180
Other revenues		17			59			96			88
Total revenues		9,759			5,386			26,802			14,268

Operating expenses
Depreciation and amortization		5,006			2,686			13,147			7,256
Property taxes and insurance		1,859			954			5,276			2,857
Asset management fee		1,043			613			2,830			1,603
Property operating expenses		932			447			2,427			1,319
General and administrative		590			260			1,856			965
Total operating expenses		9,430			4,960			25,536			14,000

Operating income		329			426			1,266			268

Other income (expense)
Interest expense		(1,767	)		(144	)		(4,114	)		(527	)
Other income		58			156			113			614
Gain on sale of real estate assets		5			-			1,157			-
Total other income (expense)		(1,704	)		12			(2,844	)		87

Net income (loss)	$	(1,375	)	$	438		$	(1,578	)	$	355

Dividends to preferred shareholders	$	4		$	4		$	12		$	12
Net income (loss) attributable to non-controlling interests		(9	)		4			(10	)		3
Net income (loss) attributable to partners	$	(1,370	)	$	430		$	(1,580	)	$	340

Net income (loss) attributable to General Partner	$	-		$	-		$	-		$	-
Net income (loss) attributable to Limited Partners	$	(1,370	)	$	430		$	(1,580	)	$	340

Weighted average number of Units outstanding, basic and diluted		4,100,946			3,118,127			3,883,312			2,816,765
Earnings per Unit, basic and diluted	$	(0.33	)	$	0.14		$	(0.41	)	$	0.12

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Changes in Partners' Capital (Unaudited)


(in thousands)	Series A Preferred			General Partner		Limited Partners			Non-Controlling Interests			Total Partners' Capital
Balance, December 31, 2024	$	125		$	8	$	276,252		$	2,075		$	278,460
Contributions, net of issuance costs of $2,099		-			-		19,667			-			19,667
Distributions		(4	)		-		(3,655	)		(27	)		(3,686	)
Net loss		4			-		(144	)		(1	)		(141	)
Balance, March 31, 2025	$	125		$	8	$	292,120		$	2,047		$	294,300
Contributions, net of issuance costs of $2,050		-			-		18,773			-			18,773
Distributions		(4	)		-		(3,922	)		(27	)		(3,953	)
Redemptions		-			-		(135	)		-			(135	)
Net loss		4			-		(66	)		-			(62	)
Balance, June 30, 2025	$	125		$	8	$	306,770		$	2,020		$	308,923
Contributions, net of issuance costs of $902		-			-		15,037			-			15,037
Distributions		(4	)		-		(4,185	)		(28	)		(4,217	)
Redemptions		-			-		(519	)		-			(519	)
Net loss		4			-		(1,370	)		(9	)		(1,375	)
Balance, September 30, 2025	$	125		$	8	$	315,733		$	1,983		$	317,849


(in thousands)	Series A Preferred			General Partner		Limited Partners			Non-Controlling Interests			Total Partners' Capital
Balance, December 31, 2023	$	125		$	9	$	190,813		$	2,181		$	193,128
Contributions, net of issuance costs of $1,809		-			-		21,810			-			21,810
Distributions		(4	)		-		(2,535	)		(27	)		(2,566	)
Redemptions		-			-		(191	)		-			(191	)
Net income		4			-		27			-			31
Balance, March 31, 2024	$	125		$	9	$	209,924		$	2,154		$	212,212
Contributions, net of issuance costs of $2,264		-			-		31,384			-			31,384
Distributions		(4	)		-		(2,846	)		(27	)		(2,877	)
Redemptions		-			-		(1,610	)		-			(1,610	)
Net loss		4			-		(117	)		(1	)		(114	)
Balance, June 30, 2024	$	125		$	9	$	236,735		$	2,126		$	238,995
Contributions, net of issuance costs of $1,694		-			-		23,512			-			23,512
Distributions		(4	)		-		(3,183	)		(28	)		(3,215	)
Redemptions		-			-		(238	)		-			(238	)
Net income		4			-		430			4			438
Balance, September 30, 2024	$	125		$	9	$	257,256		$	2,102		$	259,492

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended
(in thousands)	September 30, 2025			September 30, 2024
Cash flows from operating activities
Net income (loss)	$	(1,578	)	$	355
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		12,523			7,063
Straight-line rent adjustment		(825	)		(536	)
Noncash interest expense		971			451
Gain on sale of real estate assets		(1,157	)		-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(640	)		(174	)
Accounts payable and accrued expenses		2,219			1,973
Deferred revenues		329			535
Net cash provided by operating activities		11,842			9,667

Cash flows from investing activities
Purchase of real estate assets		(140,287	)		(87,702	)
Earnest money deposit		-			750
Capital expenditures		(421	)		(316	)
Deferred leasing costs		(225	)		(522	)
Net proceeds from sale of real estate assets		7,921			-
Net cash used in investing activities		(133,012	)		(87,790	)

Cash flows from financing activities
Proceeds from revolving credit facility		106,500			2,000
Repayments of revolving credit facility		(128,000	)		(2,000	)
Proceeds from term loan		105,220			-
Financing costs paid		(2,629	)		(521	)
Contributions		54,454			80,020
Payments for issuance costs		(4,836	)		(5,538	)
Distributions		(6,952	)		(5,084	)
Redemptions		(654	)		(2,039	)
Payment of distribution fees		(226	)		(414	)
Net cash provided by financing activities		122,877			66,424
Net change in cash and cash equivalents		1,707			(11,699	)
Cash and cash equivalents, beginning of period		11,389			44,598
Cash and cash equivalents, end of period	$	13,096		$	32,899

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited, Continued)


	Nine Months Ended
(in thousands)	September 30, 2025			September 30, 2024
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	(2,892	)	$	(75	)

Supplemental Disclosure of Noncash Investing and Financing Transactions
Increase in accrued issuance costs	$	215		$	229
Increase in accrued cash distributions	$	359		$	397
DRIP contributions	$	4,075		$	2,481
Increase in accrued DRIP distribution	$	335		$	468
DRIP distributions	$	(4,410	)	$	(2,949	)

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Description of Business

Sealy Industrial Partners IV, LP (the “Partnership”) was formed as a Georgia limited partnership on February 25, 2022. Also on February 25, 2022, the Partnership formed Sealy Industrial Partners IV REIT, LLC (the “SIP IV REIT”) as a wholly owned subsidiary of the Partnership, and Sealy Industrial Partners IV OP, LP (the “OP”) as a wholly owned subsidiary of the SIP IV REIT. Unless stated otherwise or the context otherwise requires, the terms the "Company," "we," "our," and "us" refer to the Partnership and its subsidiaries, including the SIP IV REIT, the OP, and all of its consolidated subsidiaries. Sealy Industrial Partners IV GP, LLC (the “GP”) is the general partner of the Partnership. Sealy & Company, LLC (“Sealy”) is the sole member of the GP.

The GP contributed $5,000 to the Partnership in exchange for 55.4 Class I units of limited partnership interest in the Partnership and $5,000 to the OP in exchange for 55.4 units of limited partnership interest in the OP (the "OP Units"). Sealy SIP IV Investor, LLC (“SIP IV Investor”) owns subordinated participation interests (see "Note 7. Equity" for details) in the Partnership and the OP. Sealy Capital Investor II, LLC (“SCI-II”), through the transactions contemplated in a Distribution and Contribution Agreement with SIP IV Investor, among other parties, effective as of December 31, 2022, acquired SIP IV Investor's Class I units and OP Units and is deemed to have contributed $5,000 to the Partnership for 55.4 Class I units and $2,445,000 to the OP in exchange for 27,091.4 OP Units. The ownership interests of SIP IV Investor and SCI-II in the OP are recognized and measured as noncontrolling interests in the consolidated financial statements. As of September 30, 2025, noncontrolling interests represented 0.6% of the partnership interests in the OP.

In April 2022, the Partnership commenced an offering of Class A units of limited partnership interest (the "Class A Units"), Class I units of limited partnership interest (the "Class I Units"), and Class R units of limited partnership interest (the "Class R Units", and collectively with the Class A Units and the Class I Units, the "Units") for up to $750 million, expandable to $1 billion at the discretion of the GP (the “Private Offering”). Sealy is the sponsor of the Private Offering. For each Class I Unit and Class R Unit, the Partnership receives a capital contribution of $90.25; for each Class A Unit, the Partnership receives a capital contribution of $100.00, before deducting selling commission of up to $6.00, managing broker-dealer fee of up to $2.75, and broker-dealer due diligence fee of up to $1.00. As of September 30, 2025, there were 4,171,102 Units issued under the Private Offering and outstanding (see "Note 7. Equity" for details). All Units have the same voting rights and holders of such Units are together referred to as "Limited Partners". The Limited Partners, together with the GP, SIP IV Investor, and SCI-II, are referred to herein as the “Partners”.

On December 2, 2022, the SIP IV REIT admitted preferred shareholders through an offering of $125,000 in preferred shares at $1,000 per share.

The Company commenced operations on July 15, 2022 and primarily focuses on acquiring, owning, financing, developing, redeveloping, maintaining, operating, managing, leasing, and selling income-producing industrial and other commercial real estate properties throughout the United States. Substantially all of our business is conducted through the OP. As of September 30, 2025, we owned real estate located primarily in the Southern and Midwestern United States.

Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncement

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP. Intercompany transactions among consolidated entities have been eliminated. The presentation includes the accounts of the Company and those entities in which the Company has a controlling financial interest. The Company also consolidates certain variable interest entities ("VIEs") in accordance with Accounting Standards Codification ("ASC") 810 - Consolidation. The outside equity interest in the entities controlled by the Company are reflected in the consolidated financial statements as a noncontrolling interest.

The accompanying unaudited financial information has been prepared according to the rules and regulations of the SEC. Management believes that the disclosures presented in these financial statements are adequate to make the information presented not misleading. In our opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for the reported periods have been included.

The results of operations for such interim periods are not necessarily indicative of the results for the full year and should be read in conjunction with the consolidated financial statements for the years ended December 31, 2024 and 2023 included in our Registration Statement on Form 10.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reported periods. These estimates and assumptions are based on management's experiences and judgments and believed to be reasonable at the time. Management evaluates its estimates and assumptions on an ongoing basis and makes adjustments when facts and circumstances warrant. Actual results could differ from those estimates.

Real estate assets

The Company evaluates whether a real estate acquisition is a business acquisition or an asset purchase in accordance with GAAP. GAAP defines a business as an integrated set of activities and assets that can be managed to produce economic benefits. To date, all of our acquisitions have consisted of properties whereby substantially all the fair value of the gross assets acquired is concentrated in a single asset and, therefore, the acquisitions are accounted for as asset purchases.

Assets acquired are recorded at cost based on the contract purchase price plus transaction costs (the “Purchase Price”). The Purchase Price is then allocated based on the fair value of assets acquired and liabilities assumed, which generally consists of land, land improvements, buildings, tenant improvements, deferred leasing commissions, and deferred intangible lease assets and liabilities. The fair value of the tangible assets is determined as if it were vacant. The determination of fair value includes the use of significant assumptions such as land comparables, discount rates, terminal capitalization rates and market rent assumptions. The value of acquired in-place leases is based on the difference on the date of the acquisition between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued "as-if" vacant. In allocating the fair value to identified intangibles for above-market or below-market leases, an amount is recorded based on the present value of the difference between prevailing market rental rates and the in-place lease rental rates measured over a period equal to the remaining term of the leases.

Expenditures for tenant improvements, leasehold improvements, and leasing commissions (inclusive of incentive compensation costs of personnel directly attributable to executed leases) are capitalized and amortized over the terms of the respective lease. Repairs and maintenance are charged to expense as incurred.

Real estate assets are depreciated using the straight-line method over the remaining estimated useful lives of the assets. Estimated useful lives range from 5 to 39 years for buildings and improvements, and 15 years for land improvements. Depreciation of tenant improvements is computed using the straight-line method over the shorter of the useful life of the improvement or the term of the respective lease.

The value of the acquired in-place lease intangible is amortized over the remaining lease term as depreciation and amortization expense. The amount of above-market and below-market lease intangibles are amortized as a decrease or increase of rental revenue, respectively, over the remaining lease term.

The Company classifies properties and related assets and liabilities as held for sale when the sale of an asset has been approved by management, a legally enforceable contract has been executed and the buyer's due diligence period, if any, has expired. Once classified as held for sale, the respective assets and liabilities are presented separately on the consolidated balance sheets, depreciation ceases and the properties are valued at the lower of depreciated cost or fair value, less costs to sell.

Impairment of Real Estate Assets

The Company reviews real estate assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The judgments regarding the existence of indicators of impairment are based on operating performance, market conditions, as well as our intent and ability to hold each property. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the operation and disposal of the asset. If such assets are considered to be permanently impaired, an impairment loss is recognized to reduce the carrying value of the property to its estimated fair value. The impairment loss is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The impairment assessment and fair value measurement requires the use of estimates and assumptions related to the timing and amounts of cash flow projections, discount rates, and terminal capitalization rates.

No impairment charge was recorded for the three and nine months ended September 30, 2025 and 2024.

Fair value measurements

The Company utilizes a valuation technique to measure the fair value of assets and liabilities by using a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

•

Level 1 - unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•

Level 2 - quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly;

•

Level 3 - prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The Company applies the provisions of this valuation technique in recording the assets acquired and liabilities assumed upon real estate acquisitions based on information obtained from independent appraisals, market data, information obtained during due diligence, and information related to the marketing and leasing at the specific property, which is a Level 3 measurement valuation technique. Accordingly, the assessed fair values are not necessarily indicative of the amounts the Company could realize on disposition of such assets. The use of different assumptions and/or estimation methodologies may have a material effect on the assessed fair value amounts.

As of September 30, 2025, the fair value of the Thrivent Term Loan (see "Note 4. Credit Facilities") approximated its carrying value as we had just entered into the loan agreement on September 11, 2025. To determine the fair value of our term loan debt, we will use the then-current interest rates provided by our lenders for companies with similar profiles as ours, which are Level 3 inputs.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and short-term highly liquid instruments with original maturities of three months or less. We ensure that there is enough cash on hand to cover estimated amounts for upcoming property taxes, insurance, tenant improvements and commissions, and repairs and improvements expected for up to twelve months. Cash equivalents also include funds received for equity contributions pending approval and admittance to the Partnership. Such funds are recorded as liabilities pending approval of the contribution.

Prepaid expenses and other assets

Prepaid expenses and other assets include straight-line rent receivables, right-of-use assets, prepaid distribution fees (see "Note 7. Equity" for details), prepaid property insurance premiums, earnest money deposits for future acquisitions of real estate in contract, rent and other tenant receivables, deferred leasing costs, and other refundable deposits and prepaid

expenses. Prepaid insurance is amortized over the respective insurance policy period. Management evaluates collectability of tenant receivables based on historical loss, current economic conditions and tenant profile as of each reporting date. An allowance for doubtful accounts of $22,000 was made as of September 30, 2025. There was no allowance for doubtful accounts as of December 31, 2024.

Deferred financing costs

Financing costs are direct costs incurred in obtaining debt instruments and are deferred and amortized over the term of the related debt. Deferred financing costs attributable to revolving debt are presented in the consolidated balance sheets as an asset. Deferred financing costs attributable to term loans are presented in the consolidated balance sheets as a direct reduction from the carrying amount of the associated debt when there is a balance outstanding.

Revenue recognition

All current leases where the Company is the lessor are classified as operating leases and rental income is recognized on a straight-line basis over the term of the lease agreements regardless of when payments are due. Differences between rents billed in accordance with the lease terms and the minimum rent income recognized on a straight-line basis are reported as rent receivable in prepaid expenses and other assets in the accompanying consolidated balance sheets. Rents received in advance are recognized as deferred revenues.

All of our leases are triple-net or double-net leases, where the majority of property operating expenses are recovered from the tenants. Tenant recoveries are recognized as revenue in the same period the related expenses are incurred. As the timing and pattern of transfer for the rental income and the associated tenant recoveries are the same, we account for rental income and tenant recoveries as a single combined component as rental revenue on the accompanying consolidated statement of operations in accordance with Financial Accounting Standards Board ("FASB") ASC Topic 842 - Leases.

Earnings per Unit

Earnings per Unit is calculated by dividing net income (loss) attributable to Limited Partners, who held partnership interests in Units, by the weighted average number of Units outstanding during the period. The Company had not issued any dilutive Units as of September 30, 2025.


	Three Months Ended					Nine Months Ended
	September 30, 2025			September 30, 2024		September 30, 2025			September 30, 2024
Numerator:
Net loss attributable to Limited Partners ('000s)	$	(1,370	)	$	430	$	(1,580	)	$	340
Denominator:
Weighted Average Units - Basic & Diluted		4,100,946			3,118,127		3,883,312			2,816,765

Earnings per Unit, basic and diluted	$	(0.33	)	$	0.14	$	(0.41	)	$	0.12

Segment Reporting

The Company operates within one single business segment. We manage our operations on a consolidated basis to assess performance and make strategic operating decisions. Our GP and the officers of Sealy serve as the chief operating decision maker ("CODM") for the Company. The CODM primarily uses consolidated net income to measure overall Company performance and allocate resources.

Note 3. Investments in Real Estate

Portfolio

As of September 30, 2025, we owned 21 industrial real estate properties totaling approximately 5.1 million square feet of GLA located in eight states, including Indiana, Iowa, Kansas, Mississippi, Missouri, Ohio, Oklahoma, and Texas. Below is a summary of our investments in real estate, before depreciation and amortization, as of September 30, 2025 and December 31, 2024:


(in thousands)	September 30, 2025			December 31, 2024
Buildings and improvements	$	322,502		$	226,951
Land		50,349			36,333
Land improvements		39,277			30,328
Tenant improvements		501			269
Acquired value of in-place leases		47,759			31,199
Above market rent lease intangibles		308			74
Below market rent lease intangibles		(5,094	)		(2,870	)
Total investments in real estate	$	455,602		$	322,284

Acquisitions

During the nine months ended September 30, 2025, we acquired five industrial properties.

•

On March 21, 2025, we purchased an industrial property of 575,000 square feet in Edgerton, Kansas for approximately $39.5 million, exclusive of transaction costs. This acquisition was funded with a draw from the revolving credit facility.

•

On March 24, 2025, we purchased an industrial property of 182,000 square feet in Westfield, Indiana for approximately $18.5 million, exclusive of transaction costs. This acquisition was funded with a draw from the revolving credit facility.

•

On April 25, 2025, we purchased an industrial property of 222,000 square feet in El Paso, Texas for approximately $16.2 million, exclusive of transaction costs. This acquisition was funded with a draw from the revolving credit facility. This property is encumbered by a ground lease that expires March 31, 2059, with renewal options. We capitalized the right-of-use ("ROU") asset and lease liability associated with the ground lease in the amount of approximately $2.3 million, calculated by discounting future ground lease payments at the Company's incremental borrowing rate at 6.74% as of the acquisition date. The ROU asset is included in prepaid expenses and other assets and the ROU lease liability is included in accounts payable and accrued expenses on the consolidated balance sheets.

•

On June 30, 2025, we purchased an industrial property of 244,000 square feet in Saint Louis, Missouri for approximately $25.5 million, exclusive of transaction costs. This acquisition was funded with $7.9 million of net proceeds from the disposition described below and a draw from the revolving credit facility.

•

On September 25, 2025, we purchased an industrial property of 413,000 square feet in Dallas, Texas for approximately $38.2 million, exclusive of transaction costs. This acquisition was funded with cash on hand and a $9 million draw from the revolving credit facility.

The following table summarizes the Purchase Price (includes contract purchase price and transaction costs, as defined previously) and the allocation thereof to each asset class for the nine months ended September 30, 2025:


	Nine Months Ended
(in thousands)	September 30, 2025
Buildings and improvements	$	100,574
Land		14,867
Land improvements		9,749
Acquired value of in-place leases		17,077
Above market rent lease intangibles		260
Below market rent lease intangibles		(2,240	)
Total Purchase Price	$	140,287

Disposition

During the three months ended June 30, 2025, we sold one industrial property of 56,000 square feet in Sulphur, Louisiana, for $8.3 million. The book basis of the sold property was approximately $6.8 million. We recognized a net gain of approximately $1.2 million. The net sales proceeds of $7.9 million were used to partially fund the acquisition closed on June 30, 2025 described above.

Lease intangibles

During the three and nine months ended September 30, 2025, the Company recognized the following lease intangibles amortization:


	Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Acquired value of in-place leases	$	2,428		$	1,191		$	6,140		$	3,409
Above market intangible lease asset	$	16		$	1		$	18		$	13
Below market intangible lease liability	$	(263	)	$	(76	)	$	(642	)	$	(207	)

The following table summarizes future amortization of acquired lease intangibles as of September 30, 2025:


(in thousands)	Acquired Value of In-Place Leases		Above Market Intangible Lease Asset		Below Market Intangible Lease Liability
October - December 2025	$	2,769	$	16	$	(308	)
2026		10,864		65		(1,230	)
2027		8,925		65		(1,052	)
2028		5,352		27		(594	)
2029		3,349		2		(393	)
Thereafter		3,598		68		(449	)
Total	$	34,857	$	243	$	(4,026	)
Weighted average amortization period (years)		4.0		14.6		4.3

Note 4. Credit Facilities

The following table summarizes the Company's credit facilities as of September 30, 2025 and December 31, 2024:


		Outstanding Principal as of
(in thousands)	Type	September 30, 2025			December 31, 2024		Interest Rate as of September 30, 2025			Maturity
KeyBank Credit Facility	Floating	$	13,000		$	34,500		6.23	%	11/30/2025

Thrivent Term Loan	Fixed		105,220			-		5.39	%	10/1/2030
Unamortized deferred financing costs			(1,710	)		-
Term Loan, Net		$	103,510		$	-

KeyBank Credit Facility

The Company is a party to a credit agreement with KeyBank National Association ("KeyBank") as agent and lender (the "KeyBank Credit Agreement"), which provides for a revolving credit facility (the "KeyBank Credit Facility"). On January 29, 2025, the KeyBank Credit Agreement was amended to expand the borrowing capacity of the KeyBank Credit Facility

from $45 million to $100 million and extend the maturity date to September 30, 2025. On September 19, 2025, the KeyBank Credit Agreement was further amended to extend the maturity date of the KeyBank Credit Facility to November 30, 2025 and allow options to extend the maturity date two times, with the first extension for a four-month period and the second extension for a six-month period, in each case provided that certain customary conditions are met. If the Company exercises both options to extend, the KeyBank Credit Facility would mature on September 30, 2026, and at that time, the balance outstanding would be due and payable.

Borrowings under the KeyBank Credit Facility bear interest at various floating rates based on daily SOFR as defined in the KeyBank Credit Agreement. Monthly interest payments are required on the outstanding balance.

As of September 30, 2025 and December 31, 2024, $13.0 million and $34.5 million were outstanding, respectively, under the KeyBank Credit Facility bearing a weighted average interest rate of 6.23% and 6.47%, respectively. $87.0 million remained available for borrowing as of September 30, 2025.

The Company pays an unused commitment fee of 0.20% per annum of the unused borrowing capacity under the KeyBank Credit Facility, payable quarterly. During the nine months ended September 30, 2025 and 2024, we paid approximately $57,000 and $69,000 of unused commitment fees, respectively.

The KeyBank Credit Facility is secured by the ownership interest of the Company’s subsidiaries in the real estate assets and certain carve-out provisions are also guaranteed by an affiliate of the GP. The KeyBank Credit Agreement imposes certain financial and other covenants, including restrictions on distributions.

We were in compliance with all debt covenants under the KeyBank Credit Agreement as of September 30, 2025.

Thrivent Term Loan

On September 11, 2025, Sealy Gardner Avenue, L.L.C., Sealy South Green Road, L.L.C., Sealy Commercial Drive II, L.L.C., Sealy Pederson Road, L.L.C., Sealy Crossroads L, L.L.C, Sealy Stateline K, L.L.C., and Sealy Northpoint One, L.L.C. (collectively, the "Borrowers"), each a Georgia limited liability company and a wholly owned subsidiary of the Company, entered into a loan agreement (the "Thrivent Loan Agreement") and a promissory note (the "Thrivent Promissory Note") with Thrivent Financial for Lutherans ("Thrivent") for a 5-year term loan in the amount of $105.2 million (the "Thrivent Term Loan"). The proceeds from the Thrivent Term Loan, net of lenders fees and expenses, were used to pay off the then-outstanding $76.5 million balance under the KeyBank Credit Facility and for general corporate purposes.

The outstanding principal balance of the Thrivent Term Loan bears a fixed interest rate at 5.39% per annum. Interest for the period from September 11, 2025 to September 30, 2025 in the amount of $315,000 was prepaid on September 11, 2025. Subsequently, interest-only payment of $473,000 is due on the first day of each month starting November 1, 2025. The Thrivent Term Loan matures on October 1, 2030. Prepayment in full is allowed upon payment of a Reinvestment Charge (as defined in the Thrivent Promissory Note) if prepaid on or before April 1, 2030 and without payment of a Reinvestment Charge if prepaid after April 1, 2030.

The Thrivent Term Loan is secured by, among other things, first-lien deeds of trust and mortgages encumbering seven properties owned by the Borrowers and is guaranteed by the OP.

Note 5. Operating Leases

The Company leases industrial real estate to tenants under operating leases with a weighted-average remaining lease term of 4.1 years as of September 30, 2025. The leases typically provide for base rent and other charges to cover certain operating expenses. Some of our operating leases include options to extend the lease term. For purposes of determining the lease term and lease classification, we exclude these extension periods unless it is reasonably certain at lease commencement that the option will be exercised.

As of September 30, 2025, future base rent under non-cancelable leases were as follows, assuming no exercise of lease renewal options, if any:


(in thousands)
October - December 2025	$	7,420
2026		30,018
2027		27,364
2028		20,288
2029		17,111
Thereafter		27,836
Total	$	130,037

As of September 30, 2025 and December 31, 2024, security deposit liabilities of $895,000 and $778,000, respectively, were included in accounts payable and accrued expenses on our consolidated balance sheets.

Note 6. Commitments and Contingencies

From time to time in the normal course of our business, we may be party to legal proceedings arising from the ownership and operation of our industrial properties. We believe that the liabilities, if any, that may ultimately result from such legal proceedings will not have a materially adverse effect on our consolidated financial position, operations, or liquidity.

Note 7. Equity

As of September 30, 2025, the Partners' respective ownership interests, life-to-date contributions and redemptions were as follows:


($s in thousands)	% Owned			# of Units Owned (1)		# of OP Units Owned		Contributions (2)		Redemptions (3)
Formation Contribution
General Partner (4)		0.0	%		56		55	$	10	$	-
SCI-II (4)		0.6	%		55		27,092		2,450		-
Total Formation Contribution		0.6	%		111		27,147		2,460		-

Private Offering
Class A Limited Partners		56.5	%		2,368,516		-		214,512		(753	)
Class I Limited Partners		13.5	%		567,310		-		51,200		-
Class R Limited Partners		29.4	%		1,235,276		-		113,607		(2,123	)
Total Limited Partners		99.4	%		4,171,102		-		379,319		(2,876	)

Total		100.0	%		4,171,213		27,147	$	381,779	$	(2,876	)

(1)

Includes 4,101,890 Units issued under the Private Offering and 101,084 Units issued pursuant to the Partnership's DRIP, and net of 31,873 Units redeemed.

(2)

Includes approximately $370.2 million of initial contributions and approximately $9.1 million of DRIP contributions.

(3)

Redemption amounts reflect 8,347 Class A Units and 23,526 Class R Units redeemed.

(4)

Numbers of Units and OP Units rounded in order to show the correct totals owned by the GP and SCI-II.

Private Offering

In April 2022, we commenced the Private Offering of Units for up to $750 million, expandable to $1 billion at the sole discretion of the GP. All classes of Units differ only with respect to the fees paid to broker-dealers in connection with their sale and are viewed as the same ownership interest.

The following tables set forth the net proceeds raised from the Private Offering and the number of Units issued for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended								Nine Months Ended
	September 30, 2025				September 30, 2024				September 30, 2025				September 30, 2024
($s in thousands)	# of Units Issued		Proceeds		# of Units Issued		Proceeds		# of Units Issued		Proceeds		# of Units Issued		Proceeds
Class A		106,541	$	9,615		148,963	$	13,444		367,949	$	33,206		550,056	$	49,643
Class I		-		-		22,161		2,000		14,404		1,300		27,701		2,500
Class R		53,730		4,849		98,451		8,885		221,010		19,946		309,686		27,949
Total		160,271	$	14,464		269,575	$	24,329		603,363	$	54,452		887,443	$	80,092

The Partnership's DRIP allows the Limited Partners to elect to have their cash distributions attributable to the class of Units owned automatically reinvested in additional Units of the same class. The following tables set forth the DRIP contributions received, and the number of Units issued pursuant to the DRIP, during the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended								Nine Months Ended
	September 30, 2025				September 30, 2024				September 30, 2025				September 30, 2024
($s in thousands)	# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds
Class A		10,525	$	950		7,395	$	667		29,214	$	2,637		18,813	$	1,698
Class I		530		48		605		55		1,674		151		1,677		151
Class R		5,281		477		2,792		252		14,269		1,288		6,998		632
Total		16,336	$	1,475		10,792	$	974		45,157	$	4,076		27,488	$	2,481

Distributions

The Company's distributable cash, as defined in the partnership agreement of the Partnership (as amended from time to time, the "Partnership Agreement"), is apportioned among the Limited Partners pro rata in accordance with their respective Units and pursuant to the distribution waterfall, which may include distributions to SIP IV Investor in respect of its subordinated participation interest. Distributions to each Limited Partner other than the GP will be distributed in the following order of priority:

first, to the Limited Partner until such Limited Partner’s preferred return account balance is reduced to zero. Preferred return means 6% cumulative, non-compounding annual return on the Limited Partners’ unreturned capital account balances;

ii.

second, to the Limited Partner until such Limited Partner’s unreturned capital account balance is reduced to zero; and

iii.

20% of the remaining distributable cash to SIP IV Investor as its subordinated participation interest and 80% to Limited Partners.

During the nine months ended September 30, 2025, the Company made distributions at an annualized rate of $4.05 per unit, to holders of Units of record as of the last day of each quarter, payable the following month. Distributions payable as of September 30, 2025 and December 31, 2024 were approximately $4.1 million and $3.5 million, respectively.

Redemptions

In accordance with the Partnership Agreement, Limited Partners who have held their Units for at least one year may request to have the Company redeem, in part or in whole, Units held by such Limited Partners. As the distributable cash of the Company permits, a redemption request shall be accommodated as determined by the GP in its sole discretion. To the extent the redemption amount, as defined in the Partnership Agreement, exceeds the Limited Partner's preferred return account and unreturned capital, 80% of such excess will be paid to the Limited Partner, and 20% to SIP IV Investor as part of its subordinated participation interest.

Any redemption request that would result in the Limited Partner owning less than $50,000 in Units (based upon the per Unit net asset value then in effect) shall be deemed to be a request of redemption of all such Limited Partner’s Units.

During the nine months ended September 30, 2025, 7,246 Units were redeemed for approximately $654,000. During the nine months ended September 30, 2024, 23,615 Units were redeemed for approximately $2.0 million.

Preferred Equity

In December 2022, the SIP IV REIT issued 125 non-voting Series A preferred shares at $1,000 per share for aggregate consideration before expenses of $125,000. The SIP IV REIT pays preferred dividends at an annual rate of 12% per share, payable in two installments each year.

Note 8. Related-Party Transactions

The following is a summary of amounts incurred with the GP, Sealy, and their affiliates during the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024		Financial Statement Line
Acquisition fees	$	382	$	-	$	1,379	$	868	Real estate assets
Asset management fee	$	1,043	$	613	$	2,830	$	1,603	Asset management fee
Distribution fees	$	76	$	196	$	418	$	502	Prepaid expenses and other assets
Financing fees	$	526	$	-	$	876	$	225	Deferred financing costs; Term loan
Issuance costs	$	703	$	1,419	$	3,392	$	4,617	Issuance costs
Leasing commissions	$	88	$	105	$	93	$	213	Prepaid expenses and other assets
Property management fees	$	269	$	98	$	710	$	329	Property operating expenses
Other	$	247	$	118	$	739	$	282	Various

•

Acquisition fees – the Company pays Sealy an acquisition fee of up to 1.0% of the total contract purchase price for real estate assets acquired. The Company also reimburses Sealy for acquisition-related expenses.

•

Asset management fee – the Company pays the GP an asset management fee of up to 1.0% of the book value of assets under management (the “AUM”) per annum payable monthly. The AUM is not adjusted for accumulated depreciation. As of September 30, 2025 and December 31, 2024, the asset management fee payable to the GP was $1.0 million and $325,000, respectively.

•

Distribution fees – the Class R Unit is subject to a distribution fee of 0.25% of the Class R Unit price per annum, payable to Sealy Investment Securities, LLC ("SIS"), a Sealy affiliate and the managing broker-dealer for the Private Offering, from quarterly and liquidating distributions. The Company may prepay SIS, and has prepaid, the distribution fee in the amount of 2.5% of the Class R Unitholders’ gross contributions. As of September 30, 2025 and December 31, 2024, prepaid distribution fees were $2.1 million and $1.9 million, respectively. The Company is withholding from the investors’ quarterly distributions at an annual rate of 0.25% of gross contributions currently and will withhold from liquidating distributions, not to exceed 2.5% in total.

•

Financing fees – the GP may earn a financing coordination fee of up to 0.5% of the principal amount of new or refinanced loans for services related to loan negotiations.

•

Issuance costs – the Company reimburses Sealy for offering-related costs and costs in connection with the administration of the DRIP. The following table sets forth issuance costs we incurred with related parties for the respective periods:


	Three Months Ended				Nine Months Ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Issuance costs - Sealy	$	-	$	738	$	1,231	$	2,344
Issuance costs - SIS	$	703	$	680	$	2,161	$	2,273

As of September 30, 2025 and December 31, 2024, issuance costs payable to SIS were approximately $537,000 and $351,000, respectively; no issuance costs remained payable to Sealy.

Additionally, the Company may pay SIS an alternative selling commission not to exceed 4.25% of gross offering proceeds. The Company incurred $55,000 of alternative selling commissions in the second quarter of 2025.

•

Property management fees and leasing commissions – the Company has property management agreements with Sealy, under which it pays a monthly property management fee of 2.00% to 4.00% of monthly gross receipts from the properties, less any management fee paid to a third party. Additionally, Sealy receives 50% of all late payments and returned checks collected. The property management agreements also state that Sealy may receive market-based leasing commissions based on the location of each property, less any commission paid to a third party.

•

Other costs – the Company has no employees and, in accordance with the Partnership Agreement and the confidential private placement memorandum of the Private Offering, periodically reimburses Sealy and its affiliates for costs incurred on its behalf. These costs include compensation for management and administrative personnel providing services such as accounting and property management, as well as compliance costs, consulting services related to insurance, property tax, design services, and other expenses such as postage and pursuit costs on dead deals. As of September 30, 2025 and December 31, 2024, approximately $9,000 and $222,000 of other costs remained payable, respectively.

Note 9. Concentration Risks

The Company currently owns real estate located primarily in the Southern and Midwestern United States. This geographic concentration creates a concentration of credit risk with respect to revenue generation. The Company has not experienced losses with respect to its geographic concentration.

As of September 30, 2025, one of the Company's 35 tenants had an annualized base rent representing 10.54% of total annualized base rent. No outstanding rent receivables were due from this tenant as of September 30, 2025.

Note 10. Subsequent Events

Privately Negotiated Unit Repurchases

Effective as of November 4, 2025, the Partnership entered into a Class I Unit Repurchase Agreement with each of National Financial Services LLC FBO Dilip Vellodi & Amritha Vellodi JTWROS (the “Vellodi JTWROS”) and National Financial Services LLC FBO Dilip Vellodi Irrevocable Trust DTD (the “Vellodi Trust”), pursuant to which the Partnership (i) repurchased from the Vellodi JTWROS, and the Vellodi JTWROS sold, assigned, transferred and delivered to the Partnership, all of the Vellodi JTWROS’s right, title and interest in 99,722.992 Class I Units for consideration of $89.23 (reflecting $90.25 per Class I Unit less $1.02 per Class I Unit, an amount equal to the per Class I Unit distributions for the period from July 1, 2025 through September 30, 2025) multiplied by 99,722.992, for an aggregate purchase price of approximately $8.9 million, and (ii) repurchased from the Vellodi Trust, and the Vellodi Trust sold, assigned, transferred

and delivered to the Partnership, all of the Vellodi Trust’s right, title and interest in 343,490.305 Class I Units for consideration of $89.23 multiplied by 343,490.305, for an aggregate purchase price of approximately $30.6 million. Such repurchased Class I Units have been cancelled on the Partnership’s books and records and the rights of the Vellodi JTWROS and the Vellodi Trust in and to the repurchased Class I Units have terminated.

Going Concern Considerations

For each annual and interim reporting period, the Company evaluates its ability to continue as a going concern in accordance with ASC 205-40, Going Concern, by evaluating conditions and events, including assessing the liquidity needs to meet obligations as they become due within one year after the date the financial statements are issued. The Company has debt obligations of approximately $40.5 million coming due within 12 months of the financial statement issuance date, representing an estimated loan-to-value ratio (as defined under the KeyBank Credit Agreement) of approximately 28.5%. As of the date of issuance, the Company does not have sufficient cash-on-hand to satisfy this obligation. Management anticipates satisfying the repayment obligation when it becomes due by: (i) refinancing the KeyBank Credit Facility with longer-term instruments; (ii) making partial paydowns as capital proceeds are received from the Private Offering and cash is generated from operations; (iii) using net proceeds from selling certain properties; and (iv) utilizing the extension option contractually available under the KeyBank Credit Facility.

The Company’s ability to meet its debt obligations as they come due is dependent upon its ability to refinance debt, its ability to raise capital under the Private Offering, and its ability to sell properties from its portfolio to pay down the balances. In considering whether it is probable the Company will refinance the maturing debt obligation prior to its maturity dates, management performed a comprehensive assessment including the Company’s historical ability to obtain financing, its creditworthiness based upon current and expected financial performance and leverage levels, and current debt market conditions. As a result, management has concluded it is probable that refinancing will be completed prior to the maturity date of the KeyBank Credit Facility. The Company continues to receive capital contributions from the ongoing Private Offering. Management believes these plans by the Company are sufficient to satisfy the obligations as they become due.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see "Item 1A. Risk Factors" of the Company’s Registration Statement on Form 10.

Capitalized terms used herein, but not otherwise defined, shall have the meanings ascribed to such terms in the Glossary immediately following the Table of Contents to this Quarterly Report on Form 10-Q or, if not defined therein, in "Part I. Financial Information", "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q, including the notes to the consolidated financial statements contained therein.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. Undue reliance should not be placed upon such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the Company, our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continues,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Therefore, such statements are not intended to be a guarantee of the Company's performance in future periods. The Company's actual future results may differ materially from those set forth in the Company's forward-looking statements. For information concerning these factors and related matters, see "Item 1A. Risk

Factors" of the Company’s Registration Statement on Form 10. However, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this Quarterly Report on Form 10-Q. The Company does not undertake to update any forward-looking statement, except as required by law. As a result, you should not place undue reliance on these forward-looking statements.

Overview

We have invested, and intend to continue to invest, in well-located industrial real estate assets throughout the United States with an emphasis on purchasing properties at a discount to replacement cost that produce consistent, growing cash flow, and equity appreciation. The GP manages our day-to-day business and other affairs. In April 2022, we commenced the Private Offering of up to $750 million in Units, expandable to $1.0 billion in Units at the discretion of the GP.

We commenced operations and made our first property acquisition in July 2022. The table below is a summary of our acquisition activities by year from inception to September 30, 2025:


Period	# of Properties Acquired	Contract Purchase Price ('000s) (1)		GLA ('000s)		States
July 2022 – December 2022 (2)	4	$	62,673		722	OK, MO, LA, KS
January 2023 – December 2023	8	$	91,500		1,016	MS, IA, OK
January 2024 – December 2024	5	$	165,925		1,744	TX, OH, MS
January 2025 – September 2025	5	$	137,947		1,636	KS, IN, TX, MO
Total	22	$	458,045		5,118

(1)

Represents contract purchase price, which, together with transaction costs, is generally allocated to land, land improvements, buildings, tenant improvements, deferred leasing commissions, and intangible lease assets and liabilities.

(2)

Includes one property acquired on August 25, 2022 for $7.3 million, exclusive of transaction costs, that was sold on April 25, 2025 for $8.3 million.

During the three months ended September 30, 2025, we accomplished the following:

•

Generated $9.8 million of total revenue, an 81% increase from the three months ended September 30, 2024;

•

Acquired one industrial property for $38.2 million, exclusive of transaction costs, with 413,000 square feet of GLA;

•

Closed a 5-year term loan with Thrivent for a total of $105.2 million;

•

Amended the KeyBank Credit Agreement and secured options to extend the maturity date of the KeyBank Credit Facility to September 30, 2026 if needed; and

•

Raised $14.5 million of offering proceeds from the Private Offering by issuing an aggregate of 160,271 Units.

As of September 30, 2025:

•

Our portfolio consisted of 21 industrial properties in eight states with approximately 5.1 million square feet of GLA leased to 35 tenants;

•

The occupancy rate was 100.0% with an average remaining lease term of approximately 4.1 years; and

•

The outstanding balance under our KeyBank Credit Facility was $13.0 million, with $87.0 million remaining available for borrowing, and the outstanding balance under our Thrivent Term Loan was $105.2 million.

The following tables set forth a summary of our historical consolidated financial data for the periods and dates indicated.

Sealy Industrial Partners IV, LP 10-Q